Why Price Action Should be Used

There are a lot of people who have a very difficult time understanding the complexities of how to trade the forex market. It seems like most new traders are really struggling when they get started. I know we live in the internet age, and that’s great. But the thing is there are seemingly millions of different people telling you something different. It can be completely mind numbing, because I went through the same kind of thing.

You never really get the information you need though, do you? All you ever seem to get is a guy will tell you to put a bunch of indicators on your charts, and as long as you follow them, you will be rich, right?

I’m going to have to give you some startling news. Trading with generic indicators like stochastics or moving averages, and using them as your only reason to take a trade, you will not see a whole lot of success trading the forex market. Understanding price action is so critical if you want to make money long term. After all, its the basis of technical analysis.

These are some of the advantages of price action:

With price action, you actually get to see support and resistance areas. When I say this, I don’t mean those generic indicators that supposedly put those s/r areas on these indicators. These areas cannot and will not be ever calculated by indicators.

You actually comprehend why the market moves the way that it does. When you use indicators, do you really have any idea of the underlying reasons why the market moves the way that it does.

You can predict key swing points: This is so vital. You get to know when and where a price will make a key turning point. You can also trade it on all multiple kinds of time frames. It doesn’t make any difference if you are a short term or long term trader. Price action is perfect for everybody.

It also doesn’t matter what kind of market you trade. You can trade stocks, forex, futures, derivatives, etc…. That’s how universal it is.